The Australian Securities and Investments Commission (ASIC) has expressed doubt that compelling financial institutions to hold multiple options on their approved product lists (APLs) will result in their planners actually moving beyond their own products.
Under questioning before a Parliamentary committee, ASIC deputy chairman, Peter Kell expressed doubt that one of the key Trowbridge recommendations would necessarily represent a panacea.
Kell confirmed that ASIC is currently finalising a project looking at how APLs work in practice and whether advisers do use the full range of products on approved product lists.
“I think there are two issues here,” he said. “One is having a broad range of products on an approved product list—products which are appropriately chosen to ensure that they are suitable for customers. The second issue is even if you have a broad range of products on that approved product list, will the advisers actually choose from across those products in a way that is of benefit for the customers?”
The ASIC deputy chairman said both matters were issues for the regulator, adding that “setting a simple rule like the Trowbridge rule won't necessarily address that second issue.”
“It's something we're very interested in,” he said. “We are looking at it closely. But it's not something where we have the ability, in any case, to directly regulate: you must have this many products on your APLs.”